What is the Lender’s Role in Foreclosure?
A San Francisco bankruptcy attorney
What is the Lender’s Role in Foreclosure?
What is foreclosure?
Foreclosure is the process by which the lender retakes possession of the property on which the mortgage was based. The lender’s interest is secured in the home and if there is a default in repaying on the note, the lender has the option of foreclosing on the property in order to satisfy the outstanding balance.
Why would a lender foreclose?
A lender will generally want to foreclose on a property to protect its interest. There is a concern that the property will not be kept in good condition or that the borrower will abandon the property and cause substantial disrepair. A foreclosure is also a way for the lender to regain some of the credit it extended to the borrower.
Will my lender tell me about a foreclosure?
Yes. The lender must inform you of an intent to sell the property. Generally the lender will also give you statements indicating how much is due in order to stop any foreclosure proceeding. Lenders must inform borrowers of any developments regarding the foreclosure and whether there is a sale date.
What if I rent my home and I’ve defaulted on the mortgage?
The lender must still give notice to the tenants. If the home is occupied there is generally a 60 day period to allow for the renters to vacate the property. Once the time runs on having the renters vacate, the lender will generally need to bring an unlawful detainer proceeding against the tenants in order to have them removed from the property. If you are renting it is important to let the lender know the home is occupied so there is plenty of notice given to the renters.
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